Thrift Savings Plan open season begins April 15

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Civilian and military employees can sign up for or change Thrift Savings Plan accounts during "open season" from April 15 to June 30.

"TSP is an easy, long-term retirement savings plan that everyone should consider," said Maj. Alessandra Stokstad, chief of the Air Force Personnel Center's contact center here. "Current account holders might be interested, too, in transferring money from one fund to another -- the TSP folks are set up to handle that."

"Either way it's a great supplement to military and civilian retirement plans," said Stokstad. "It's important to note that TSP is not limited to investing in stocks. People can choose safer government securities as well."

"Employees already contributing to the TSP are encouraged to review their TSP plan and account balances," said Janet Thomas of the center's civilian benefits and entitlements service team, "as the open-season period is the best time to open an account or make changes to an existing one."

TSP offers investors the chance for lower taxes each year they contribute while not having to pay taxes on earnings until they reach retirement.

"You can take out loans and make withdrawals from your TSP account," said Thomas. "And you can keep your account even if you leave military or federal service."

Investment money is deposited directly from each paycheck "so you never have to think about it," said Stokstad. "That makes it easy to 'pay yourself first' while only investing what you deem appropriate."

The five TSP funds are: the Government Securities Investment (G) Fund; the Common Stock Index Investment (C) Fund; the Fixed Income Index Investment (F) Fund; the Small Capitalization Stock Index Investment (S) Fund; and the International Stock Index Investment (I) Fund.

"As with any individual retirement account, the sooner you begin contributing, the better," said Stokstad.

Account changes made on or before May 31 will take effect June 1 for both military members and civilians. Changes made on or after June 1 will become effective in the following pay period for civilians and the following month for military members.

Some of the specifics of the program include:

Military: Military members can contribute up to 8 percent of their base pay. Airmen also have the ability to invest all or part of their bonuses or special pay. But their total yearly tax-deferred investment cannot exceed $12,000, except those serving in tax-free combat zones are allowed up to $40,000 in annual contributions.

Military members can enroll through the Defense Finance and Accounting Service Web site at http://www.dfas.mil/emss/. They can also enroll by filling out a Form TSP-U-1 at local military personnel flights, finance offices and family support centers.

Civilian: Contribution limits are based on which retirement system an employee has.

Federal Employees' Retirement System employees may contribute up to 13 percent of basic pay each pay period. The government provides matching funds of up to 4 percent as well as an automatic 1 percent each pay period whether the employee contributes or not, making the government's contribution 5 percent.

Employees covered by the Civil Service Retirement System may contribute up to 8 percent of basic pay, but do not receive any matching contributions.

The percentage FERS and CSRS employees may contribute will increase by one point each year through 2005, when they will be restricted only by the Internal Revenue Code's annual limit, which is $12,000 in 2003, Thomas said.

Specific information is available for civilians on the Thrift Savings Web site at http://www.tsp.gov/ or the BEST homepage at http://www.afpc.randolph.af.mil/dpc/best/menu.htm and for airmen at http://www.afpc.randolph.af.mil/mpf/TSP/thrift_savings_plan.htm.

All Air Force-serviced civilian employees must choose their TSP contribution amount or changes through the BEST automated phone system at (800) 997-2378, or commercial 527-2378 in San Antonio.

Hearing-impaired employees may contact BEST by calling TDD (800) 382-0893 or commercial 565-2276. Overseas employees can dial a toll-free direct access number for the country they are in. Direct access numbers and instructions are located at http://www.att.com/international_business/dialing_guide/country-diallist.cgi.

Counselors are available weekdays from 7 a.m. to 6 p.m. CST. The BEST Employee Benefits Information System web application is located at http://www.afpc.randolph.af.mil/dpc/BEST_GRB/EBIS.htm.

People can choose which fund to contribute to by calling the TSP automated ThriftLine at (504) 255-8777 or on the TSP Web site at http://www.tsp.gov/. Military members with general TSP questions can call the AFPC contact center at DSN 665-5000 or toll-free (866) 229-7074.(Courtesy of AFPC News Service)